What Your Mortgage Broker Actually Does (And Doesn't Cost You)

I get this question constantly: "So... how do you get paid? Do I pay you? Is there a catch?" The answer is simpler than people expect, but the banking industry has done an excellent job making it confusing. Let me clear it up.

How brokers get paid

In the vast majority of residential mortgage transactions, the lender pays the broker, not you. When your mortgage funds, the lender pays a commission (typically 0.50% to 1.10% of the mortgage amount) to the brokerage. You don't see this on your closing statement. It doesn't affect your rate. It comes out of the lender's margin.

This is the same model as a real estate agent working with a buyer. The seller pays the commission, not the buyer. You get professional representation at no direct cost.

When there IS a fee

There are situations where a broker might charge you directly. This typically happens with private or alternative lending (bad credit, unusual properties, complex self-employment income) where mainstream lenders won't approve the deal. In those cases, the broker fee is disclosed upfront, in writing, before you agree to proceed. No surprises.

For a standard purchase or refinance with a mainstream lender? You pay nothing.

What a broker actually does differently

Access to 30+ lenders. Your bank offers you their products at their rates. A broker shops your file across dozens of lenders, banks, credit unions, monoline lenders, and trust companies, to find the best fit for your specific situation.

Rate negotiation. Lenders compete for broker-submitted deals. The rate you see posted on a bank's website is rarely the rate you'll actually get through a broker, because lenders offer brokers volume pricing that isn't available to walk-in customers.

Product matching. Not all mortgages are created equal. Some have massive prepayment penalties. Some restrict your ability to refinance. Some have collateral charges that make switching later expensive. A broker knows the fine print across all lenders and steers you away from products that look good today but cost you later.

The hard cases. Self-employed? New to Canada? Bruised credit? Unusual property? A bank says no and sends you away. A broker knows which lenders specialize in your situation and can often find an approval where the bank couldn't.

What a broker doesn't do

We don't replace your lawyer. We don't do your home inspection. We don't negotiate your purchase price. We handle the financing piece: getting you approved, finding the best rate and terms, coordinating with your lawyer on the mortgage instructions, and making sure funds are ready on closing day.

The real question to ask

Don't ask "how much does a broker cost?" Ask "what am I leaving on the table by NOT using one?" In most cases, the answer is a better rate, better terms, and someone whose job it is to fight for your deal when things get complicated.